Investors are betting that humans turn to tech startups for wellness solutions.
Wellness is not just a buzzword, it’s a $4.2 Trillion market and growing. It’s a movement and it’s happening now. Our society has taken a turn and people are more focused on their physical, mental and spiritual health than ever before. Being happy and healthy has evolved into a top priority.
In walks technology…Apps and startups have enabled this movement by creating technology to address our mind, fitness, sleep, diet, reproductive health, environment and beyond. WellTech has been surging with innumerable apps and companies over the last decade. Investment activity has followed in suit with over $2.2B in investment in the 97 modern wellness startups we’ve identified as of March 2019.
Rising healthcare costs have created a growing need for alternate options to address our wellness – physical, mental and spiritual. With increased healthcare costs, increased stress and ailments, and a growing trend toward happiness and health, the market is primed for wellness apps and technology. These technologies give users assistance in achieving overall wellness and help them take proactive measures for a healthy lifestyle. Modern wellness startups have stepped up to fill the gap. People are turning to consumer technology from Apple, Google, Amazon and others to solve these needs –they have less barriers to entry, despite some initial costs for hardware.
Startups Come in Four Flavors
We have classified these wellness startups into four categories: Mind, Body, Community and Space (check out our detailed infographic on this space here). Mind includes startups addressing emotion recognition, intelligent assistance therapy, mental health, mindfulness, mood shaping and stress. Body includes connected apparel, fitness, health, nutrition, sexual wellness and sleep. Community includes the busy market of on-demand fitness and wellness, cryptofitness and on-demand elder care. Lastly, Space involves air, light, scent, sleep, sound, touch and manipulation of whole space.
- Community 37%, $811M.
- Body has 29%, $647M.
- Mind has 18%, $403M.
- Space has 15%, $333M.
There are some outliers, like the newly-crowned $1B+ valued unicorn, Calm, a startup that helps users relax, sleep, or focus. Calm recently raised $88M to total their funding to $116M, a leader in the Mindfulness subcategory of the Mind category.
Community’s large amount of funding is lead by ClassPass, a subscription-based fitness app, at $239M and Practo, a medical advice and booking app, with $234M. These are both large startups that have matured and have accrued funding over the years.
Future Changes in WellTech
The Community category, which incorporates the on-demand fitness and wellness providers, is pretty saturated with lots of emerging startups and investments in the last couple of years. We expect this to flatten out.
Mindfulness has been heating up, expect more here, especially with Headspace, a meditation and mindfulness app that will match funding and valuation to rival Calm. Also, be on the lookout for funding in the Intelligent Assistance Therapy sector, with startups like talkspace, an online therapy app.
Sleep startups don’t currently have the funding that other subcategories have, but we expect that to change soon. Between wearables and environment management, this is a wildly growing sector. Apple recently acquired Beddit, showing market value/
We’re often asked about the underfunded categories, as these have the most potential to grow. We see three regions that may quickly grow if new innovations are brought forth to market:
- New sensors and software. That can measure brain wave activity, galvanic skin response, facial recognition or accurately measure breathing are underfunded categories that may blossom into new business models
- Corporate Wellness Technology (CWT) Platforms. Employee wellness solutions that combine multiple features into one suite. Corporations are adopting these technologies for employee wellness, yet they are loosely strung together and lack a cohesive experience.
- Data and analytics that measure actual human improvements. There’s a need for analytics that combine biometrics to actually gauge if wellness practices are making a long-lasting effect beyond just simple usage this is for consumer level, crowd aggregation, and at societal level.
We’ll also see acquisitions that create super apps that offer comprehensive wellness platforms that address mind, body, community and space. Google and Apple are likely contenders in this arena, but there’s certainly room for an independent startup to take this on. Large sports brands like Nike, Under Armour and Reebok have an opportunity to step forward to lead on this, as well.
We have a spreadsheet tracking these top 100 startups and will report on a periodic basis how this market is shaping up.
Research assistance by Julie George